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Italy: Overview of tax measures, effective 1 January 2020

Italy: Overview of tax measures, effective January 2020

Tax measures were enacted at the end of December 2019 as part of the Budget Law for 2020, and generally are effective 1 January 2020.

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The following provides a listing of certain tax measures in the Budget Law for 2020. A report from the KPMG member firm in Italy provides more details about these measures (see below).


Tax measures in Budget Law for 2020

In the Budget Law for 2020, the following briefly summarizes the tax measures enacted at the end of 2019 and effective beginning in 2020:

  • A special tax credit regime replacing bonus depreciation rules for capital goods
  • Changes to the research and development (R&D) tax credit rules for investments in R&D, green transition, industry 4.0 technological innovation, among others
  • A tax credit for industry 4.0 training
  • A one-year renewal of a tax credit for investments in southern Italy

Concerning income taxes, the Budget Law for 2020 provides for the following items:

  • Reinstatement of the notional interest deduction (ACE) retroactively from 1 January 2019
  • Repeal of the “mini IRES” regime (IRES = corporate income tax)
  • Enactment of a digital services tax
  • Renewal of the step-up in the tax basis of business assets and on the substitute tax to be paid on the difference, but at a reduced rate of 12% for depreciable assets and 10% for non-depreciable assets
  • Deduction of local real estate tax (IMU) for corporate income tax (IRES) purposes
  • Delayed implementation of a deduction of write-downs of receivables and losses on receivables
  • Deductible losses expected on customer receivables during the first time adoption of IFRS 9 financial statements
  • Changes to the rules for deductions related to amortization of goodwill and other intangible assets

Regarding indirect taxes, the Budget Law for 2020:

  • Introduces a tax on single-use plastic products that are used for packaging, the protection or delivery of goods or foodstuffs, expected to be effective 1 July 2020
  • Imposes a tax on non-alcoholic sugary drinks (the “sugar tax”)

Finally, the Budget Law for 2020 includes measures concerning reporting by Italian financial institutions under the FATCA regime; a provision that re-unifies local taxes (the tax on municipal real estate (IMU) and the tax on municipal services (TASI)) with one base rate of tax; and new rules on the tax collection procedures by local authorities.

Read a January 2020 report [PDF 253 KB] prepared by the KPMG member firm in Italy

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